•sSays Nigeria's fiscal realities deserve critical reflection
The Speaker of the House of Representatives, Tajudeen Abbas, on Wednesday pledged that the National Assembly would fully support the successful implementation of the 2025 budget proposed by the executive for the betterment of Nigerians.
The Speaker gave the assurance in his vote of thanks; following the presentation of the 2025 Appropriation Bill at a joint session of the National Assembly by President Bola Ahmed Tinubu,
According to the Speaker, “This is not simply your budget; It is a national project that requires the collaboration of all branches of government. We will work to ensure their timely passage, provide legislative support for critical reforms, and conduct robust oversight to ensure transparency and efficiency in their implementation.
“Mr. President, colleagues, let us take a moment to recognize and honor the profound sacrifices made by each and every Nigerian over the past year. The removal of fuel subsidies, rising inflation and adjustments to economic policies have created challenges.
“On behalf of the House of Representatives and the entire National Assembly, I extend our deepest gratitude to His Excellency, President Bola Ahmed Tinubu, GCFR, for presenting the Appropriation Bill 2025 to this Joint Session. Today's presentation fulfills a fundamental constitutional mandate and reflects his vision and strong commitment to addressing the needs and aspirations of all Nigerians.
“Over the past eighteen months, your administration has taken bold and decisive steps to reform our economy. The elimination of fuel subsidies, the unification of exchange rates and the introduction of innovative economic policies have laid a solid foundation for sustainable growth and development. While these reforms have required short-term sacrifices, they are acts of bravery and patriotism. History teaches us that transformative progress often begins with difficult decisions. The examples of China's market reforms, India's liberalization, and South Korea's industrialization confirm the lasting benefits of such bold action. These lessons inspire confidence that the reforms underway in Nigeria will foster economic growth, reduce poverty and ensure long-term prosperity.
“Mr. President, your administration's reforms have disrupted the status quo, provoking resistance from vested interests. However, these courageous measures underscore your determination to prioritize the well-being of Nigerians. The National Assembly stands ready to support these reforms through legislative support and to facilitate public participation for greater understanding and acceptance. Collaboration between all branches of government remains essential to achieve our shared goals.
“Your Excellency, 2024 has been a year of mixed economic fortunes. The National Statistics Office reported GDP growth of 3.46% in the third quarter, up from 3.19% in the second, driven largely by the services sector. Despite the challenges posed by climate change and insecurity, agriculture remained a key contributor: it accounted for 17.22% of nominal GDP in the first quarter and 22.61% in the second quarter.
“However, inflation, which rose to 33.88% in October, along with rising food and energy costs, continues to put pressure on households across the country. However, the International Monetary Fund's projection of 3.2% growth by 2025 underlines a positive trajectory if reforms are maintained and structural issues are addressed.”
This is just as he noted that the government needed to reflect on the fiscal realities of the Nigerian economy, especially the country's budget-population ratio when comparing Nigeria with other countries in Africa.
He acknowledged that President Tinubu's administration had taken bold and decisive steps to reform the economy in the last 18 months, highlighting that the removal of fuel subsidies, the unification of exchange rates and the introduction of innovative economic policies have laying a solid foundation for sustainable growth and development.
Abbas said that while these reforms have required short-term sacrifices, they are acts of bravery and patriotism. He added that history has shown that transformative progress often begins with difficult decisions.
The speaker cited examples from China's market reforms, India's liberalization and South Korea's industrialization that he said affirm the lasting benefits of such bold action. “These lessons inspire confidence that the reforms underway in Nigeria will foster economic growth, reduce poverty and ensure long-term prosperity,” he said.
He also stated that the Tinubu administration's reforms have “disrupted the status quo, provoking resistance from vested interests”, noting that “nevertheless, these bold measures underline his determination to prioritize the well-being of Nigerians.”
The President noted that the proposed 2025 budget of N49.7 trillion (a 35 per cent increase from 2024) is “ambitious and commendable”. He also said that projections of 4.6 percent Gross Domestic Product (GDP) growth, a crude oil price of $75 per barrel, an exchange rate of 1,400 naira to the dollar and oil production of 2, 06 million barrels per day is bold but achievable. “
According to him, “Nevertheless, Nigeria’s fiscal realities deserve critical reflection. Despite being Africa's most populous nation, with more than 220 million people, our 2024 national budget of $36.7 billion remains modest compared to countries like South Africa, with a budget of $160 billion for its 60s. millions of citizens; Egypt, with 110 billion dollars for 110 million people; Algeria, with 60 billion dollars for 45 million people; and Morocco, allocating $50 billion for its 37 million residents.
While stating that stabilizing prices, increasing agricultural productivity, expanding infrastructure and investing in education, healthcare and security “remain top priorities”, President Abbas added that to strengthen national unity and build trust, it is essential that the government communicate its achievements. effectively to the Nigerian people.
According. He said: “The agreements from his visit to China in September 2024 are aimed at transforming railway transportation, improving digital literacy, boosting agriculture and strengthening national security, while elevating Nigeria-China relations to a partnership. comprehensive strategy. Commitments in France also secured €300 million for critical sectors, while Brazil's $4.2 billion donation to strengthen agriculture underlines its focus on sustainable growth.
“In particular, one of the notable achievements of your administration is promoting the autonomy of local governments, ensuring that resources reach grassroots communities, and empowering them to address their specific needs. This commitment to transparency and accountability will have a lasting impact, particularly in our rural communities.
“Your Excellency, the proposed 2025 budget of N49.7 trillion (a 35% increase from 2024) is truly ambitious and commendable.
“The projections of 4.6% GDP growth, a crude oil price of $75 per barrel, an exchange rate of 1,400 naira to the dollar and oil production of 2.06 million barrels per day are bold. but achievable.
“Nevertheless, Nigeria’s fiscal realities deserve critical reflection. Despite being Africa's most populous nation, with more than 220 million people, our 2024 national budget of $36.7 billion remains modest compared to countries like South Africa, with a budget of $160 billion for its 60s. millions of citizens; Egypt, with 110 billion dollars for 110 million people; Algeria, with 60 billion dollars for 45 million people; and Morocco, allocating $50 billion for its 37 million residents.
“Indeed, Nigeria’s low tax revenue also remains a major constraint. Our tax-to-GDP ratio, currently at approximately 10.9% for 2024, is among the lowest in Africa, significantly below the continental average of 15.6%. By comparison, South Africa's tax-to-GDP ratio is 25.4%, while Rwanda and Ghana, with much smaller populations, report ratios of 15.1% and 14.1%, respectively.
“Even our VAT collection efficiency of around 20% is notably below the near 70% efficiency achieved by South Africa, Equatorial Guinea and Zambia.
“Addressing these challenges requires urgent and comprehensive tax reforms to broaden our tax base, improve compliance, streamline administration and reduce reliance on debt.
“The National Assembly will continue to work with your administration to ensure that such reforms are equitable, effective and take into account the needs of vulnerable populations.
“To this end, we have engaged stakeholders to address concerns raised about the tax reform bills, fostering trust and cooperation. “I have personally led numerous high-level meetings and consultations with state governors and other key stakeholders on this issue, achieving positive results.”
While praising the leadership role of President Tinubu, he said: “Mr President, thank you for your visionary leadership and unwavering commitment to the progress of Nigeria. The 2025 budget represents a crucial step towards economic recovery and sustainable development. “I am confident that his reforms will soon bring tangible benefits to all Nigerians.”
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